2004-2005 change
Labor productivity rose in 2005 in 76 of the 86 detailed manufacturing industries. Sixty percent of the industries recorded productivity gains of at least 4.0 percent, and more than a quarter had productivity growth of 8.0 percent or more. The largest productivity gain, 38.4 percent, was recorded in computer and peripheral equipment manufacturing (NAICS 3341), followed by a 23.7 percent productivity increase in apparel knitting mills (NAICS 3151). Both industries combined strong output increases with reductions in labor hours. Hours fell particularly steeply in the apparel manufacturing industries. Among the ten industries with declining or flat labor productivity, the railroad rolling stock manufacturing industry (NAICS 3365) had the largest drop, 8.0 percent.
In 2005, labor productivity increased in each of the three largest detailed manufacturing industries. In motor vehicle parts manufacturing (NAICS 3363), productivity increased 4.7 percent. In printing and related support activities (NAICS 3231) and plastics product manufacturing (NAICS 3261), productivity rose 4.5 and 2.7 percent, respectively. Productivity growth in all three industries resulted from a combination of increases in output and declines in labor hours.
Unit labor costs, which reflect the total labor costs required to produce a unit of output, fell in 59 of the 86 detailed manufacturing industries in 2005. The largest declines in unit labor costs, 18.8 percent and 17.3 percent, occurred respectively in computer and peripheral equipment manufacturing (NAICS 3341) and apparel knitting mills (NAICS 3151), the industries with the largest productivity gains.
Productivity increased in 2005 in all 21 manufacturing subsectors. In 14 of the subsectors, productivity rose 5.0 percent or more. In several subsectors, as in many industries, declining hours combined with increasing output to produce large productivity gains in 2005. One of these, the leather and allied products subsector (NAICS 316), recorded
the largest increase in productivity, 9.8 percent. The combination of output growth and hours declines also resulted in large productivity gains for the textile product mills, chemicals, and electrical equipment and appliances subsectors.
Long-term trends
Between 1987 and 2005, productivity increased in 85 of the 86 detailed manufacturing industries studied. Output rose in 69 industries and hours fell in 69 industries. (The industries with increasing output were not always the same as those with declining hours.) Productivity increased fastest in four detailed industries in the computer and electronic products manufacturing subsector (NAICS 334). Productivity grew an average 24.6 percent per year in computer and peripheral equipment (NAICS 3341), 19.0 percent per year in semiconductors and electronic components (NAICS 3344), 7.8 percent in audio and video equipment (NAICS 3343), and 7.4 percent in communications equipment (NAICS 3342). The only industry with declining labor productivity over the long-term period was accessories and other apparel manufacturing (NAICS 3159). Productivity in this industry fell at an average annual rate of 1.0 percent, reflecting a more rapid decline in output than in hours.
Unit labor costs fell in 19 of the 86 detailed manufacturing industries from 1987 to 2005. The four industries in the computer and electronic products manufacturing subsector (NAICS 334) that posted the fastest productivity increases also had the largest declines in unit labor costs. Unit labor costs fell an average 18.2 percent per year in computer and peripheral equipment (NAICS 3341), 13.1 percent in semiconductors and other electronic equipment (NAICS 3344), 4.2 percent in communications equipment (NAICS 3342), and 2.2 percent in audio and video equipment (NAICS 3343).
